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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →Sanmina agreed to acquire SCI Systems in a stock-for-stock merger in 2001, but the often-quoted $6 billion was an announcement-date estimate that included assumed debt and depended on Sanmina’s share price. Sanmina later reported a $4,410,991,000 purchase price for accounting purposes, calculated on a different basis. The merger closed on December 6, 2001.
Why did Sanmina buy SCI Systems?
Sanmina and SCI told shareholders that combining the companies would give them greater scale in the electronics manufacturing services (EMS) market. Their joint proxy said the boards believed a combined company would be better positioned to compete globally and had greater potential for improved long-term operating and financial results. Those were the companies’ expectations for the merger, not proof that the anticipated benefits were later achieved. Sanmina and SCI joint proxy
The companies’ stated strategic aims included:
- Combining operations to build scale and offer end-to-end systems capabilities.
- Expanding services and improving global order fulfillment.
- Broadening customer and revenue bases, including in growth sectors.
- Applying Sanmina’s vertical integration in printed circuit boards, backplanes, enclosures, cable assemblies, components, and subsystems across a larger business.
At the merger’s close, EE Times described the combined company as manufacturing in 23 countries and having annual revenue in the $12 billion range. Those are contemporaneous, press-reported figures for the company at that time, not current company statistics. EE Times, December 6, 2001
How much did Sanmina pay for SCI Systems?
There is no single figure that answers every version of “how much.” The two commonly cited amounts use different valuation bases:
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| Figure | What it represents | Basis |
|---|---|---|
| Approximately $6.0 billion | Contemporaneous announcement headline value | EE Times reported that the estimate included assumed debt and used Sanmina’s July 13, 2001 closing share price. It was not a statement of cash paid. EE Times, July 16, 2001 |
| $4,410,991,000 | Purchase price reported in Sanmina’s 2002 Form 10-Q | Purchase accounting, including the fair value of shares and options and direct transaction costs; not the $6 billion announcement valuation. Sanmina Form 10-Q |
What made up the reported purchase-accounting price?
Sanmina’s 2002 Form 10-Q broke the total into approximately $4.2 billion fair value for 200.6 million shares, $203 million fair value for 13.0 million vested and unvested options, and $21 million in direct transaction costs. For the shares, the filing used an average closing price of $20.87 across the five trading days ending July 17, 2001. These are components of the purchase-accounting calculation, not cash payments to SCI shareholders.
Was the Sanmina-SCI deal really worth $6 billion?
The $6 billion figure is a valid description of the announced aggregate transaction value on the basis reported at the time: it included assumed debt and was tied to Sanmina’s share price on July 13, 2001. The later $4.411 billion figure is Sanmina’s purchase-accounting price, calculated using specified fair values and transaction costs. Because the figures measure the transaction differently, one should not be treated as a correction of the other or as a universal deal value.
What were the merger terms?
Under the definitive merger agreement, SCI shareholders were to receive 1.36 shares of Sanmina common stock for each SCI share, subject to required approvals. The companies signed the agreement on July 13, 2001. Sanmina SEC Form 8-K and joint proxy
When did Sanmina acquire SCI Systems?
The companies announced their agreement on July 16, 2001, after signing it on July 13. The merger was completed on December 6, 2001; SCI then became a wholly owned subsidiary of Sanmina-SCI. Sanmina Form 10-Q
What revenue mix did Sanmina expect after the merger?
After closing, EE Times reported management projections for the combined company’s revenue mix. CEO Jure Sola said the merger would give Sanmina a more diversified revenue stream and broader group of customers. The publication reported these projected category shares:
| Category | Projected share |
|---|---|
| Communications | 40–45%, down from more than two-thirds of Sanmina’s revenue |
| High-end computing | 20–25% |
| PCs | 15–20% |
| Multimedia | 5–10% |
| Medical, aerospace, and industrial | 10–15% |
These were management projections reported by EE Times at the time, not verified actual results. The transaction and purchase-accounting disclosures establish the terms and recorded price, but do not by themselves show whether the expected strategic benefits or revenue mix materialized. EE Times, December 6, 2001
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